Amal Ltd Annual Report 2023-24
The logo of Amal Ltd is a diya whose constituents are an earthen pot, ghee, a wick and a flame. Our actions (symbolised by ghee) will remain within the boundary of ethics (symbolised by the earthen pot) and we will through hard work (symbolised by the wick) achieve our purpose (symbolised by the flame). Contents I never lose. I either win or learn. ~ Nelson Mandela 1 Corporate profile 50 Notice 2 Purpose 64 Standalone performance trend 3 Values Standalone Financial Statements 4 Board of Directors 66 Independent Auditor’s Report 6 Letter to the shareholders 78 Financial Statements 7 Directors’ Report Consolidated Financial Statements 14 Annexure to the Directors’ Report 131 Independent Auditor’s Report 27 Management Discussion and Analysis 140 Financial Statements 28 Corporate Governance Report Forward-looking statements In this report, we have shared information and made forward-looking statements to enable investors to know the product portfolio, business logic of our Company and thereby comprehend its prospects. These include all statements other than statements of historical facts, including those regarding the financial position, business strategy, management plans and objectives for future operations. Such statements that we make are based on our assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipate’, ‘believe’, ‘estimate’, ‘intend’, ‘plan’, ‘project’ or words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised although we believe we have been prudent in our assumptions. The actual results may be affected because of uncertainties, risks and even inaccurate assumptions. If uncertainties or known or unknown risks materialise or if underlying assumptions prove inaccurate, actual results may vary materially from those anticipated, believed, estimated, intended, planned or projected. We undertake no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.
1 Corporate profile Amal Ltd (Amal) is engaged in the manufacturing and marketing of bulk chemicals such as Sulphuric acid and Oleum and their downstream products such as Sulphur dioxide and Sulphur trioxide. The plant is located in Ankleshwar, Gujarat, India. Amal was promoted by Piramal Group in 1974-75; the controlling interest of the Company was sold to Atul Ltd in 1985-86. The Company has incorporated a wholly-owned subsidiary, Amal Speciality Chemicals Ltd on October 12, 2020.
Amal Ltd | Annual Report 2023-24 Purpose We are committed to significantly enhancing value for our stakeholders by: fostering a spirit of continuous learning and innovation adopting developments in science and technology providing high quality product and services, thus becoming the most preferred partner having people who practice Values and exemplify a high standard of behaviour seeking sustained, dynamic growth and securing long-term success taking responsible care of the surrounding environment improving the quality of life of the communities we operate in
3 Values In an environment where change is a way of life, continuity of Values provides stability and is fundamental to us. We have therefore formalised key Values and are committed to institutionalising them. We will seek to create an environment wherein these Values are consistently practised and nurtured and ensured that they are not compromised. INTEGRITY Working with honesty, following the highest standards of professionalism. Integrity is when our decisions and actions remain consistent with our thoughts and words, written or spoken. UNDERSTANDING How well we work with others depends on our ways to connect and this in turn is based on our level of Understanding of human relationships. This certainly does not mean that we accept poor performance, but that we do it the right way. Understanding is the external manifestation of internal realisation. UNITY Working together and taking advantage of synergy while harnessing the unique abilities of each of us to achieve a larger goal. Unity is the realisation that though we may work in different areas, we are finally interconnected and that interdependence is a higher order of living than independence. Though we may be many, we share a common purpose. RESPONSIBILITY Delivering value and taking ownership of actions. Responsibility must also give us the realisation that what is good for the business must be in the overall good. In essence, we must work with a spirit of trusteeship for the shareholders and other stakeholders. What comes to us must be returned many times over. EXCELLENCE A drive that is more from inside than outside; it is about us seeking to continuously improve and develop an eye for innovation even in day to day work. Excellence is about excelling in everything we do and not giving up. Excellence is also a journey, not simply a destination in itself.
Amal Ltd | Annual Report 2023-24 Mr Rajeev Kumar is the Managing Director of the Company since 2017. Mr Kumar holds a graduate degree in Engineering from the Indian Institute of Technology, Roorkee and a postgraduate degree in Management from Indira Gandhi National Open University. Mr Abhay Jadeja is a Director of the Company since 2010. Mr Jadeja is a Managing Partner in Jadeja & Satiya, Advocates, a partnership firm. He holds a graduate degree in law from the University of Mumbai. Board of Directors Mr Gopi Kannan Thirukonda is a Director of the Company since 2010 and is also the Chief Financial Officer and Whole-time Director of Atul Ltd. Mr Thirukonda is a Fellow Member of the Institute of Chartered Accountants of India, the Institute of Cost and Management Accountants of India and the Institute of Company Secretaries of India. He holds a postgraduate diploma in Management from Indian Institute of Management, Ahmedabad. Mr Sujal Shah is a Director of the Company since 2010. Mr Shah holds a graduate degree in Commerce. He is a founder partner of SSPA & Co, Chartered Accountants. He is a Fellow Member of the Institute of Chartered Accountants of India. Mr Sunil Lalbhai is the Chairman of the Company since 2010 and is also the Chairman and Managing Director of Atul Ltd. Mr Lalbhai holds a postgraduate degree in Chemistry from the University of Massachusetts and a postgraduate degree in Economic Policy and Planning from Northeastern University.
5 Ms Mahalakshmi Subramanian is a Director of the Company since 2014. Ms Subramanian holds a graduate degree in Commerce. She is a Fellow Member of the Institute of Chartered Accountants of India and is a Certified Financial Risk Manager from the Global Association of Risk Professionals. Mr Jyotin Mehta is a Director of the Company since 2022. Mr Mehta holds a graduate degree in Commerce. He is a Fellow Member of the Institute of Chartered Accountants of India, the Institute of Cost and Management Accountants of India and the Institute of Company Secretaries of India. Ms Dipali Sheth is a Director of the Company since February 2024. Ms Sheth is the founder of Eternity Legal. She holds a postgraduate degree in Law from the University of Mumbai and is a Solicitor in Mumbai, England, and Wales. Ms Drushti Desai is a Director of the Company since February 2024. Ms Desai is a Partner at Bansi S Mehta & Co and formerly served as the Chairman of the Western India Region of the Institute of Chartered Accountants of India (ICAI). She holds a graduate degree in Commerce from the University of Mumbai and is a Fellow Member of the Institute of Chartered Accountants of India. Mr Venkatraman Srinivasan is a Director of the Company since February 2024. He had previously served as a member of the Depositor Education and Awareness Fund established by the Reserve Bank of India and as a co-opted member of Expert Advisory Committee of the Institute of Chartered Accountants of India (ICAI). He holds a graduate degree in Commerce from the University of Mumbai and is a Fellow Member of the ICAI.
Amal Ltd | Annual Report 2023-24 Letter to the shareholders Fellow Shareholders, Consolidated sales of our Company in 2023-24, that also comprised sales of its only wholly-owned subsidiary, Amal Speciality Chemicals Ltd (ASC), at ` 86 cr increased by 40% (though standalone sales at ` 31 cr were lower by 20%) compared with those in 2022-23. Its consolidated profit before tax (PBT) was ` 3 cr against loss of ` 16 cr (and its standalone PBT at ` 3 cr was higher compared to ` 1 cr) in 2022-23. Our Company had wiped out its carried forward loss of ` 56 cr in 2021-22, but because its subsidiary, ASC, incurred loss of ` 17 cr in 2022-23 (due to the start-up problems in its new project – see paragraph 4 below), it has to still wipe out loss of `14 cr as on March 31, 2024. We are working to fully wipe out this loss in 2025-26. We are pleased to share some of the operational highlights of 2023-24 related to performance improvement: i) overall sales volume increased by 8%, ii) sales volume of Sulphur dioxide increased by 43%, iii) direct sales increased by 2%, iv) steam generation increased by 20%, v) electricity generation per day from the turbine increased by 197% (ASC) and vi) working capital decreased by one day. The plant of ASC operated at 92% capacity utilisation as against 70%. The plant was commissioned in 2022-23 at an investment of ` 81 cr, but it had faced start-up problems – they were largely overcome only in the second half of 2023-24. We are confident that the performance of ASC will further improve. In the 1st quarter of 2024-25, consolidated sales of our Company at ` 21 cr were higher than ` 17 cr (and similarly standalone sales at ` 7 cr were higher than ` 4 cr) in the same period of 2023-24. Consolidated PBT was at ` 16 lakh against loss of ` 3 cr in the same period of 2023-24. The numbers for the 2nd quarter are expected to be better. Our Company profitability, at standalone and consolidated level is lower (compared to what it used to be) because of the adverse prices of raw materials and finished products. So our endeavour is to i) improve our Company performance related to efficiency and productivity and ii) grow sales of value added products. Current consolidated sales potential of our Company (based on the prevailing market prices – which are lower by 36% than the average of the last five years of the finished products) is ` 100 cr. We are working on a couple of projects to seek a reasonable rise in sales and profitability – we will make the announcement at an appropriate time. Consolidated borrowing of our Company, which at peak was ` 68 cr, came down to ` 35 cr as on March 31, 2023 because of the rights issue. As of June 30, 2024, the borrowing stood at ` 19 cr with debt equity of 0.27. We hope to further bring down the borrowing in 2024-25 to make the business more resilient to market swings. Our Company contributed ` 12 lakh in 2023-24 towards fulfilling its obligation to society; the funds were mostly used for taking up, in all, eight projects under two programs, namely, health and infrastructure, both of which are in step with the national priorities. The projects which were implemented through Atul Foundation included two blood donation camps, five eye camps and repair of one anganwadi. Mr Abhay Jadeja, Mr Sujal Shah and Ms Mahalakshmi Subramanian, Independent Directors (IDs), retired from the Board after completing their tenure. We are grateful to them for their critical yet constructive and valuable inputs. Ms Drushti Desai, Ms Dipali Sheth and Mr Venkatraman Srinivasan joined the Board as IDs. We thank our team members for their commitment and dedication and take this opportunity to thank all other stakeholders of our Company, namely, customers, suppliers, government and society for their consistent support. Last, but not the least, we thank you for your support and trust which puts onus on team Amal to perform. We are looking forward to grow, serve and share. Sincerely, (Rajeev Kumar) (Sunil Lalbhai) Managing Director Chairman
7 Directors’ Report Dear Members, The Board of Directors (Board) presents the 50th annual report of Amal Ltd together with the audited Financial Statements for the financial year ended on March 31, 2024. 01. Financial results (` lakhs) Standalone Consolidated 2023-24 2022-23 2023-24 2022-23 Revenue from operations 3,133 3,916 8,609 6,132 Sales and other income 3,337 4,319 8,627 6,215 Profit | (loss) before tax 345 137 278 (1,569) Provision for tax 103 64 107 42 Profit | (loss) for the year 243 73 170 (1,611) Other comprehensive income (net of tax) 0 3 (0) 3 Total comprehensive income | (expense) 243 76 170 (1,608) Balance brought forward 288 212 (1,539) 69 Balance carried forward 531 288 (1,388) (1,539) )02. Performance Standalone revenue for the year at ` 3,133 lakhs decreased by 20% compared to that of last year. The decline was the outcome of decrease in price realisation by 28% and increase in volume by 8%. Profit before tax (PBT) at ` 345 lakhs increased by 152% mainly because of higher sales volume and better efficiency. Consolidated revenue for the year at ` 8,609 lakhs increased by 40% compared to that of last year. The increase was the outcome of full year of operations of Amal Speciality Chemicals Ltd. The Company earned PBT of ` 278 lakhs during the year. As a result, the consolidated loss stood at ` 1,388 lakhs, compared to that of ` 1,539 lakhs last year. 03. Dividend The Board did not recommend any dividend considering the carried forward loss of ` 1,388 lakhs on a consolidated basis. 04. Energy conservation, technology absorption and foreign exchange earnings and outgo Information required under Section 134(3) (m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, as amended from time to time, forms a part of this report which is given on page number 15. 05. Insurance The Company has taken adequate insurance to cover the risks to its employees, property (land and buildings), plant, equipment, other assets and third-parties. 06. Risk management Risk management is an integral part of the business practices of the Company. The framework of risk management concentrates on formalising a system to deal with the most relevant risks, building on existing management practices, knowledge and structures. With the help of a reputed international consultancy firm,
Amal Ltd | Annual Report 2023-24 the Company has developed and implemented a comprehensive risk management system to ensure that risks to the continued existence of the Company as a going concern and to its growth are identified and remedied on a timely basis. While defining and developing the formalised risk management system, leading standards and practices have been considered. The risk management system is relevant to the business reality, is pragmatic and simple and involves the following: a) Risk identification and definition - Focuses on identifying relevant risks, creating | updating clear definitions to ensure undisputed understanding along with details of the underlying root causes | contributing factors. b) Risk classification - Focuses on understanding the various impacts of risks and the level of influence on their root causes. This involves identifying various processes, generating the root causes and a clear understanding of risk inter-relationships. c) Risk assessment and prioritisation - Focuses on determining risk priority and risk ownership for critical risks. This involves the assessment of the various impacts taking into consideration the risk appetite and the existing mitigation controls. d) Risk mitigation - Focuses on addressing critical risks to restrict their impact(s) to an acceptable level (within the defined risk appetite). This involves a clear definition of actions, responsibilities and milestones. e) Risk reporting and monitoring - Focuses on providing to the Audit Committee and the Board, periodic information on risk profile evolution and mitigation plans. Roles and responsibilities Governance The Board has approved the Risk Management Policy of the Company. The Company has laid down procedures to inform the Board on a) to d) listed above. The Audit Committee periodically reviews the risk management system and gives its recommendations, if any, to the Board. The Board reviews and guides the Risk Management Policy. Implementation Implementation of the Risk Management Policy is the responsibility of the Management. It ensures the functioning of the risk management system as per the guidance of the Audit Committee. The Company has a risk management oversight structure in which each sub-segment has a Chief Risk and Compliance Officer. The Management at various levels takes accountability for risk identification, appropriateness of risk analysis and timeliness as well as the adequacy of risk mitigation decisions at both individual and aggregate levels. It is also responsible for the implementation, tracking and reporting of defined mitigation plans, including periodic reporting to the Audit Committee and the Board. As per the requirements of Rule 3(1) of the Companies (Accounts) Rules 2014, the Company uses only such accounting software for maintaining its books of account that records the audit trail of all the transactions, creates an edit log of all the changes made in the books of account along with when such changes are made and by whom. This feature of recording the audit trail has operated throughout the year and was not tampered with during the year. In respect of the aforesaid accounting software, after thorough testing and validation, the audit trail was not enabled for direct data changes at the database level in view of the possible impact on the efficient performance of the system. In respect of audit trail at the database level, the Company has established and maintained an adequate internal control framework over its financial reporting and based on its assessment, concluded that the internal controls for the year ended on March 31, 2024, were effective. It is
9 in the process of upgrading the system to meet the database level audit trail requirement and expects to implement this from May 01, 2024. 07. Internal financial controls The internal financial controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Financial Statements. These include those policies and procedures that: a) pertain to the maintenance of records, which in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company, b) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of the Financial Statements in accordance with Generally Accepted Accounting Principles and that receipts and expenditures are being made only in accordance with authorisations of the Management and the Directors of the Company, c) provide reasonable assurance regarding the prevention or timely detection of unauthorised acquisition, use or disposition of the assets that can have a material effect on the Financial Statements. A reputed international consultancy firm has reviewed the adequacy of the internal financial controls with respect to the Financial Statements. The Management assessed the effectiveness of the internal financial controls over financial reporting as of March 31, 2024, and the Board believes that the controls are adequate. 08. Fixed deposits The Company did not accept any deposits from public and as such no amount on account of principal or interest on deposits from public was outstanding as of March 31, 2024. 09. Loans, guarantees, investments and security During the year under review, loans totaling ` 1,699 lakhs as of March 31, 2023, were converted into 1,69,90,000 non-cumulative redeemable preference shares at ` 10 per share, amounting to ` 1,699 lakhs. An additional investment of ` 500 lakhs was made into 50,00,000 non-cumulative redeemable preference shares at ` 10 per share. Particulars of loans, guarantees, investments and security provided are given on page numbers 98 and 99. 10. Subsidiary company Amal Speciality Chemicals Ltd has been classified as the material subsidiary in accordance with the applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). 11. Related party transactions All the transactions entered into with the related parties were in the ordinary course of business and on an arm’s length basis and were reviewed and approved by the Audit Committee. During 2023-24, material-related party transactions, in terms of the Listing Regulations, were approved by the members. Details of such transactions are given on page number 111. No transactions were entered into by the Company that required disclosure in Form AOC -2. The Company submits details of related party transactions in the specified format to the stock exchanges on a half-yearly basis. 12. Corporate social responsibility The Corporate Social Responsibility (CSR) Policy, the CSR Report and the composition of the CSR Committee are given on page number 15. 13. Annual return Annual return is available on the website of the Company at: www.amal.co.in/investors/information-for- stakeholders/annual-general-meeting
Amal Ltd | Annual Report 2023-24 14. Auditors Statutory Auditors Deloitte Haskins & Sells LLP, Chartered Accountants were reappointed as the Statutory Auditors of the Company at the 48th Annual General Meeting (AGM) held on September 08, 2022, until the conclusion of the 53rd AGM. The Auditor’s Report for the financial year ended on March 31, 2024, does not contain any qualification, reservation or adverse remark. The report is enclosed with the Financial Statements in this annual report. Secretarial Auditors SPANJ & Associates, Company Secretaries, continue to be the Secretarial Auditors for 2023-24 and their report is given on page number 19. The Secretarial Audit Report of Amal Speciality Chemicals Ltd, the material subsidiary, is also given on page number 22. 15. Directors’ responsibility statement a) In preparation of the annual accounts for the financial year that ended on March 31, 2024, the applicable accounting standards have been followed and there are no material departures. b) The accounting policies were selected and applied consistently and judgements and estimates thus made were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period. c) Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. d) The attached annual accounts for the year ended on March 31, 2024, were prepared on a going concern basis. e) Adequate internal financial controls to be followed by the Company were laid down and they were adequate and operating effectively. This is given under para number 7. f) Proper systems were devised to ensure compliance with the provisions of all applicable laws and the same were adequate and operating effectively. 16. Directors 16.1 Retirement | Reappointment | Appointments a) Retirement Mr Sujal Shah and Mr Abhay Jadeja, Independent Directors completed their second term as Independent Directors and retired on March 31, 2024. The Board places on record its deep appreciation for their valuable contribution through sustained involvement, critical analysis and insightful guidance. b) Reappointment According to the Articles of Association of the Company, Mr Sunil Lalbhai retires by rotation and being eligible offers himself for reappointment at the AGM scheduled on September 05, 2024. c) Appointment Ms Dipali Sheth, Ms Drushti Desai and Mr Venkatraman Srinivasan were appointed as Independent Directors for a period of five years, effective February 01, 2024. In the opinion of the Board, they possess knowledge, experience and expertise relevant to the Company. 16.2 Policies on appointment and remuneration The salient features of the Policy are as under: 16.2.1 Appointment While recommending the appointment of the Directors, the Nomination and Remuneration Committee considers the following factors:
11 a) Qualification: well-educated and experienced in senior leadership positions in industry | profession. b) Traits: positive attributes and qualities. c) Independence: criteria prescribed in the Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Regulations), for the Independent Directors, including no pecuniary interest and conflict of interest. 16.2.2 Remuneration of the Non-executive Directors a) Sitting fees: up to ` 40,000 for attending a Board, Committee and any other meeting b) Commission: up to 1% of net profit as may be decided by the Board based in the following factors. i) Profit ii) Attendance iii) Category (Independent or Non-executive) 16.2.3 Remuneration of the Managing Director This is given under para number 17.2. 16.3 Criteria and method of annual evaluation 16.3.1 The criteria for evaluation of the performance of a) the Executive Directors, b) the Non-executive Directors (other than Independent Directors), c) the Independent Directors, d) the Chairman, e) the Committees of the Board and f) the Board as a whole are summarised in the table at the end of the Directors’ Report at page number 13. 16.3.2 The Independent Directors have carried out annual: a) review of the performance of the Executive Director b) review of the performance of the Non-executive Directors (other than Independent Directors) c) review of the performance of the Chairman, assessment of quality, quantity and timeliness of the flow of information to the Board and d) review of the performance of the Board as a whole. 16.3.3 The Board has carried out an annual evaluation of the performance of: a) its committees, namely, Audit, Corporate Social Responsibility, Nomination and Remuneration and Stakeholders Relationship b) the Independent Directors The templates for the above purpose were circulated in advance for feedback from the Directors. 16.4. Familiarisation programs for the Independent Directors The Company has familiarisation programs for its Independent Directors. It comprises, amongst others, presentations by and discussions with the Senior Management on the nature of the industries in which it operates, its vision and strategy, its organisation structure and relevant regulatory changes. 17. Key Managerial Personnel and other employees 17.1 Appointments and cessations of the Key Managerial Personnel There were no appointments | cessations of the Key Managerial Personnel during 2023-24. 17.2 Remuneration The Remuneration Policy of the Key Managerial Personnel and other employees consist of the following: 17.2.1 Components: a) Fixed pay i) Basic salary ii) Allowances
Amal Ltd | Annual Report 2023-24 iii) Perquisites iv) Retirals, and b) Variable pay 17.2.2 Factors for determining and changing fixed pay: a) Existing compensation b) Education c) Experience d) Salary bands e) Performance f) Market benchmark 17.2.3 Factors for determining and changing variable pay: a) Company performance b) Business performance c) Individual performance d) Work level 18. Analysis of remuneration The information required pursuant to Sections 134(3)(q) and 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given on page number 26. The Company is not required to disclose the information required as there were no employees during 2023-24, drawing remuneration exceeding the limit specified. 19. Management Discussion and Analysis The Management Discussion and Analysis, as required in terms of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is given on page number 27. 20. Corporate Governance Report 20.1 Declaration given by the Independent Directors The Independent Directors have given declarations under Section 149(6) of the Act. 20.2 Report The Corporate Governance Report is given on page number 28. Details about the number of meetings of the Board held during 2023-24, are given on page number 33. The composition of the Audit Committee is given on page number 37. All the recommendations given by the Audit Committee were accepted by the Board. 20.3 Whistleblower Policy The Board, on the recommendation of the Audit Committee, had approved a vigil mechanism (Whistleblower Policy). The Policy provides an independent mechanism for reporting and resolving complaints pertaining to unethical behaviour, actual or suspected fraud and violation of the Code of Conduct of the Company and is displayed on the website of the Company at www.amal.co.in/investors/ policies/ No personnel has been denied access to the Audit Committee. 20.4 Secretarial standards Secretarial standards as applicable to the Company were followed and complied with during 2023-24. 20.5 Prevention, prohibition and redressal of sexual harassment Details required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and rules thereunder are given on page number 41. 21. Acknowledgements The Board expresses its sincere thanks to all the employees, customers, suppliers, lenders, regulatory and government authorities, stock exchanges and investors for their support. For and on behalf of the Board of Directors (Sunil Lalbhai) Mumbai Chairman April 19, 2024 DIN: 00045590
13 Evaluation of Evaluation by Criteria Executive Director Independent Directors Qualification, Experience, Availability and attendance, Integrity, Commitment, Governance, Transparency, Communication, Business leadership, People leadership, Investor relations Non-executive Director (other than Independent Directors) Independent Directors Qualification, Experience, Availability and attendance, Integrity, Commitment, Governance, Independence, Communication, Preparedness, Participation and Value addition Independent Director All other Board Members Qualification, Experience, Availability and attendance, Integrity, Commitment, Governance, Independence, Communication, Preparedness, Participation and Value addition Chairman Independent Directors Qualification, Experience, Availability and attendance, Integrity, Commitment, Governance, Impartiality, Communication, Business leadership, People leadership and Meeting conduct Committees Board Members Composition, Process and Dynamics Board as a whole Independent Directors Composition, Process and Dynamics Note: DIN stands for Director identification number.
Amal Ltd | Annual Report 2023-24 Annexure to the Directors’ Report No. Subject title Page 1. Energy conservation, technology absorption and foreign exchange earnings and outgo 15 2. Subsidiary, joint venture and associate company 15 3. Corporate social responsibility 15 3.1 A brief outline of the CSR Policy, programs and scope of the Company 15 3.2 Composition of the CSR Committee 16 3.3 Details of URL for disclosure of the composition of the CSR Committee, CSR Policy and CSR projects on the website of the Company 16 3.4 Impact assessment 16 3.5 CSR obligation 16 3.6 Details of the CSR amount spent | unspent for the financial year 17 3.7 Details of unspent amount for the preceding three financial years 17 3.8 Details relating to the capital asset created or acquired through CSR spend 18 3.9 Reasons for not spending two percent of the average net profit 18 4. Secretarial Audit Report 19 5. Secretarial Audit Report – Amal Speciality Chemicals Ltd 22 6. Statement of particulars under Sections 134(3)(q) and 197(12) of the Companies Act, 2013 26
15 1. Energy conservation, technology absorption and foreign exchange earnings and outgo Information required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, as amended from time to time, forms a part of this report. However, as per the provisions of Section 136 of the Companies Act, 2013, the report and accounts are being sent to all the members excluding the information relating to the conservation of energy, technology absorption, foreign exchange earnings and outgo. 2. Subsidiary, joint venture and associate company (` lakhs) No. Name Equity share- capital Reserves and surplus Total assets Total liabilities Investments Revenue Profit before tax Provision for tax Profit after tax Dividend % share- holding Reporting currency Subsidiary company 1. Amal Speciality Chemicals Ltd 772 3,372 9,078 4,934 - 5,786 (194) - (194) - 100% INR 3. Corporate social responsibility 3.1 A brief outline of the CSR Policy, programs and scope of the Company 3.1.1 Policy The Company will volunteer its resources to the extent it can reasonably afford to contribute towards enhancing the quality of life, thereby the standard of living of people, particularly the marginalised sections of society. Essentially, the indicative beneficiaries are the needy, who are living below the poverty line in rural or urban areas, particularly where Atul is operating. The endeavour is to uplift them through the chosen programs (mentioned below) so that they can live with dignity and self-respect. 3.1.2 Programs and Scope Atul Foundation will take up projects and | or carry out activities under six broad programs: a) Education, b) Empowerment, c) Health, d) Relief, e) Infrastructure and f) Conservation with varied scope of work. a) Education i) Establish and | or support educational institutions ii) Enhance education in rural areas iii) Support needy and | or meritorious students b) Empowerment i) Establish and | or support vocational training institutes ii) Promote sustainable livelihood opportunities for women and youth iii) Promote integrated development of rural | tribal areas c) Health i) Establish and | or improve medical care centres ii) Promote health, nutrition, hygiene and sanitation iii) Promote sports and fitness d) Relief i) Eradicate hunger and malnutrition ii) Support deserving | needy people iii) Provide support during natural calamities
Amal Ltd | Annual Report 2023-24 e) Infrastructure i) Develop and | or improve rural infrastructure ii) Develop and | or improve rural amenities iii) Develop and | or improve child-friendly infrastructure f) Conservation i) Conserve natural resources ii) Protect environment | flora and fauna iii) Protect and | or promote art and culture 3.2 Composition of the CSR Committee: No. Name of Directors Designation | Nature of Directorship Number of meetings held during the year Number of meetings attended duringthe year 1. Abhay Jadeja1 Chairman | Independent Director 1 1 2. Gopi Kannan Thirukonda Member | Non-Independent Director 1 1 3. Rajeev Kumar Member | Managing Director 1 1 4. Jyotin Mehta2 Chairman | Independent Director NA NA 1 up to March 31, 2024 | 2 effective April 19, 2024 3.3 Details of URL for disclosure of composition of the CSR Committee, CSR Policy and CSR projects on the website of the Company: www.amal.co.in/investors/policies 3.4 Impact assessment: not applicable 3.5 CSR obligation: (` lakhs) a) Average net profit of the Company as per Section 135(5) 602.04 b) 2% of the average net profit of the Company as per Section 135(5) 12.05 c) Surplus arising out of the CSR projects or programs or activities of the previous financial years - d) The amount required to be set-off for the financial year - e) Total CSR obligation for the financial year [b)+c)-d)] 12.05
17 3.6 a) Details of the amount spent (ongoing projects and other than ongoing projects) for the financial year: ` 12.05 lakhs b) Amount spent on administrative overheads: nil c) Amount spent on impact assessment: nil d) Total amount spent for the financial year [a)+b)+c)]: ` 12.05 lakhs e) CSR amount spent or unspent for the financial year: (` lakhs) Amount unspent Total amount spent for the financial year Total amount transferred to the Unspent CSR Account as per Section 135(6) Amount transferred to any fund specified under Schedule VII as per the second proviso to Section 135(5) Amount Date of transfer Name of the fund Amount Date of transfer 12.05 Nil NA NA Nil NA NA: not applicable f) Excess amount for set-off, if any: (` lakhs) No. Particulars Amount (i) 2% of the average net profit of the Company as per Section 135(5) 12.05 (ii) Total amount spent for the financial year 12.05 (iii) Excess amount spent for the financial year [(ii)-(i)] Nil (iv) Surplus arising out of the CSR projects or programs or activities of the previous financial years Nil (v) Amount available for set-off in succeeding financial years [(iii)-(iv)] Nil 3.7 Details of unspent CSR amount for the preceding three financial years: No. Preceding financial year Amount transferred to the unspent CSR account under Section 135 (6) Amount in unspent CSR account under Section 135(6) Amount spent in the financial year Amount transferred to any fund specified under Schedule VII as per Section 135(5), if any Amount remaining to be spent in succeeding financial years Deficiency, if any Amount Date of transfer - - - - - - - - -
Amal Ltd | Annual Report 2023-24 3.8 Whether any capital assets have been created or acquired through CSR spend in the financial year? No Details relating to the asset(s) created or acquired through CSR spend in the financial year: No. Short particulars of the property | asset(s) [including complete address and location of the property] Pincode of the property | asset(s) Date of Creation Amount of CSR amount spend Details of entity | authority | beneficiary of the registered owner CSR registration number, if applicable Name Registered address - - - - - - - - 3.9 Reasons if the Company has failed to spend two percent of the average net profit as per Section 135(5): not applicable Chairman CSR Committee Managing Director Jyotin Mehta DIN: 00033518 Rajeev Kumar DIN: 07731459
19 4. Secretarial Audit Report Form number MR – 3 Secretarial Audit Report For the financial year ended March 31, 2024 {Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014} To the members of Amal Ltd We have conducted the Secretarial Audit of the compliance with applicable statutory provisions and the adherence to good corporate practices by Amal Ltd (hereinafter called the Company). The Secretarial Audit was conducted in a manner that provided me with a reasonable basis for evaluating the corporate conducts | statutory compliances and expressing my opinion thereon. Based on my verification of the books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorised representatives during the conduct of the Secretarial Audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on March 31, 2024, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company as per Annexure I for the financial year ended on March 31, 2024, according to the provisions of: a) The Companies Act, 2013 (Act) and the rules made thereunder; b) The Securities Contracts (Regulation) Act, 1956 and the rules made thereunder; c) The Depositories Act, 1996 and the regulations and bye-laws framed thereunder; d) The Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of foreign direct investment, overseas direct investment and external commercial borrowings; e) The following regulations and guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Act): i) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ii) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 iii) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 iv) The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 v) The Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021 vi) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with clients vii) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 viii) The Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018 ix) The Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018
Amal Ltd | Annual Report 2023-24 Other sector-specific laws as applicable to the Company, including product laws, pollution laws, manufacturing laws and safety laws as per confirmations of compliances placed before the Board of Directors, for our verification carried out on a test-check basis and considered as assurance for the existence of a proper compliance management system. However, it has been found that there were no instances requiring compliance with the provisions of the laws indicated at points iii), iv), v) and vii) of para e) mentioned hereinabove during the period under review. We have also examined compliance with the applicable clauses of the following: a) Secretarial standards issued by the Institute of Company Secretaries of India. b) The Listing Agreements entered into by the Company with BSE Ltd and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended). During the period under review, the Company has complied with the provisions of the Act, rules, regulations, guidelines, standards, mentioned hereinabove and there is an adequate compliance management system for the purpose of other sector-specific laws. We have relied on the representations made by the Company and its officers for systems and mechanisms formed by the Company for compliance with sector-specific laws and regulations applicable to the Company. We further report that the Board of Directors of the Company is duly constituted with the proper balance of the Executive Directors and the Non-executive Directors (Independent and Non-independent). The changes in the composition of the Board that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice was given to all the Directors to schedule the Board meetings. The agenda and detailed notes on the agenda were sent at least seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. The majority decision is carried through, while the views of the dissenting members are captured and recorded as part of the minutes, wherever required. We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with the applicable laws, rules, regulations and guidelines. We further report that during the audit period, there were no specific events | or actions having a major bearing on the affairs of the Company in pursuance of the above-referred laws, rules, regulations, guidelines, standards, etc. For SPANJ & Associates Company Secretaries (Ashish C Doshi) Partner Membership number: F 3544 Certificate of practice number: 2356 Ahmedabad UDIN: F003544F000224765 April 19, 2024 Peer review certificate number: 702 | 2020 Note: This report is to be read with our letter of even date, which is annexed as Annexure I and forms an integral part of this report.
21 Annexure – I to the Secretarial Audit Report To the members of Amal Ltd Subject: Secretarial Audit Report for the financial year ended on March 31, 2024 Our report of even date is to be read along with this letter. 1. Maintenance of secretarial records is the responsibility of the Management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit. 2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. We believe that the processes and practices we followed provide a reasonable basis for our opinion. 3. We have not verified the correctness and appropriateness of financial records and books of account of the Company. 4. Wherever required, we have obtained the representation of the Management about the compliance of laws, rules and regulations and the happening of events, etc. 5. The compliance with the provisions of corporate and other applicable laws, rules, regulations, and standards is the responsibility of the Management. Our examination was limited to the verification of procedures on a test basis. 6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the Management has conducted the affairs of the Company. For SPANJ & Associates Company Secretaries (Ashish C Doshi) Partner Membership number: F 3544 Certificate of practice number: 2356 Ahmedabad UDIN: F003544F000224765 April 19, 2024 Peer review certificate number: 702 | 2020
Amal Ltd | Annual Report 2023-24 5. Secretarial Audit Report – Amal Speciality Chemicals Ltd Form number MR – 3 Secretarial Audit Report For the financial year ended March 31, 2024 {Pursuant to Section 204(1) of the Companies Act, 2013 and Rule number 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014} To, The members of Amal Speciality Chemicals Ltd I have conducted the Secretarial Audit of the compliance with applicable statutory provisions and the adherence to good corporate practices by Amal Speciality Chemicals Ltd (hereinafter called the Company). The Secretarial Audit was conducted in a manner that provided me with a reasonable basis for evaluating the corporate conducts | statutory compliances and expressing my opinion thereon. Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorised representatives during the conduct of the secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on March 31, 2024, has complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2024, according to the provisions of: a) The Companies Act, 2013 (the Act) and the rules made thereunder; b) The Securities Contracts (Regulation) Act, 1956(SCRA) and the rules made there under; c) The Depositories Act, 1996 and the regulations and bye-laws framed there under; d) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; e) The following regulations and guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Act): i) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; ii) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; iii) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; iv) The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021; v) The Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021; vi) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993, regarding the Companies Act and dealing with clients;
23 vii) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021; viii) The Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018; and ix) The Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 However, it has been found that there were no instances requiring compliance with the provisions of the laws indicated at point no. (ii), (iii) and (v) mentioned hereinabove during the period under review. f) For review of other sector-specific laws as applicable to the Company, due to diverse laws applicable to the sector in which the Company operates and the remote location of manufacturing operations carried out by the Company, it was not feasible to verify the compliance management system relating to sector-specific laws and therefore, the same has not been verified and reported. I have also examined compliance with the applicable clauses of the following: i) Secretarial Standards issued by The Institute of Company Secretaries of India. ii) The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015; However, it was noted that the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, are not applicable to the Company as securities of the Company are not listed on any recognised stock exchange. During the period under review, the Company has complied with the provisions of the Act, rules, regulations, guidelines and standards mentioned hereinabove and there is an adequate compliance management system for the purpose of laws applicable to the Company as mentioned hereinabove. I have relied on the representations made by the Company and its representatives for systems and mechanisms formed by the Company for the compliance of laws and regulations applicable to the Company. I further report that the Board of Directors of the Company is duly constituted with the proper balance of Directors, Non-executive Directors and Independent Directors, wherever applicable. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. During the year under review, the designation of Mr Syamal Kumar Prankrishna De (DIN: 08963169), was changed from Director to Whole-time Director of the Company effective September 20, 2023, for a period of five years and Ms Mahalakshmi Subramanian (DIN: 06940781), Independent Director of holding company was appointed as an Additional Director of the Company being a material subsidiary company. Adequate notice is given to all Directors to schedule the Board meetings. The agenda and detailed notes on agenda were sent at least seven days in advance in all cases except cases where shorter notice was given, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Majority decision is carried through while the views of the dissenting members are captured and recorded as part of the minutes, wherever required. I further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines mentioned hereinabove. I further report that during the audit period of the Company there were no specific events | actions having a major bearing on the Company’s affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc except the following:
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